Source: https://www.youtube.com/watch?v=y0f8-CSOJ58
Channel: Steven Cravotta (steven.builds)
RevenueCat recently published a 339-page
report covering over 115,000
apps and over 16 billion dollars in
total revenue. I analyzed the entire
thing. And what I found in this report
is that there is a huge gap between the
winners and the losers [music]
in the app space. One of the biggest
factors in these app success is their
paywall, their paywall strategy, their
pricing strategy. [music] The bottom 25%
of apps shrank 33% year over year. And
this gap is not random. It’s because
[music] the top app companies in the
world are leveraging the most recent and
up-to-date paywall strategies. [music]
So, in this video, we are going to break
down exactly what the top 25% of apps
are doing and why most app founders get
[music] this completely wrong. Only 4.6%
of apps ever reach 10,000permonth.Andit′snotbecausetheyhavebadproducts,theyhavebadcode,orthefoundershavenoideawhatthey′redoing.It′sbecausethey′renotleveragingthelatestandgreatestmarketingandpaywalltactics.Let′sgetintoit.Okay,herewehaveit.The100paywallsstudy.We′regoingtobecoveringabsolutelyeverythingfromthemarketresearchtodesigningapaywalltopositioningyourpaywalland,ofcourse,howtotestyourpaywalltomaximizeyourLTV.Firstthingsfirst,let′sgetintothestats.I′vebeensayingforyearsthathardpaywallscrushthefreemiumpaywalls,andhere′sthedatatobackthatup.So,allofyouinthecommentswhohavebeentellingmethathardpaywallsdon′twork,nobodylikeshardpaywalls,you′rewrong.Here′swhy.Hardpaywallscrush.Theyconvertfivetimesbetterthanfreemium,but,ofcourse,therearedownsidesandtheadvantagedisappearsoverthelongrun.So,yes,afteralongperiodoftime,ifyourattentionisinsane,youwillmakethemoneyback.Butformostpeopleoutthere,peoplearen′tretaininginyourappforayearplus.So,havingahardpaywallwillgetyouareturnonyourinvestmentsomuchfaster.Doesitaddextrafrictionintoyourapp?Sure.Butyouareabletoconvertatamuchhigherpercentageandgetthereturnonyourspend,yourmarketingspendbackmuchquicker.Anotherimportantstattokeepinmindfromthisresearchisthatthewindowtowinisclosing.55ofallcancellationshappenondayzero,thefirstdaythatsomeonehasyourappinstalled.So,itisimperativethatyoudelivertheuserstheahamoment,thekeyvalueinsideofyourappasquickaspossible.Guidetheuserstosuccess.Whatdoessuccesslooklikeinyourapp?Becauseifyoudon′tdothatquickly,theywillleaveandtheywillcancel.Somemoreinterestingstatsherebeforewediveintoimplementingallthesestrategies.Thegeographyofyourinstallsdoesalsomatter.Whereyouaremarketing,thetypesofusers,whereyourusersarecomingfromdoesmatter.Ofcourse,NorthAmericadrivingthehighestreturnonspendfollowedbyAsiaPacificandWesternEurope.Also,theaveragerevenueperinstallsplitbyplanduration.ThisissomethingIwishIknewwhenIwasscalingPuffCount.Appsthatsellyearlysubscriptionsprimarilymonetizetwotimesbetterthanothergroupsinthefirst14daysandtheystillholdthatadvantageatday60.So,ifyouhaveayearlyplan,youaredoingitrightandwe′regoingtoshowyouhowtooptimizeforyouryearlyplanonyourhardpaywall.Andonthatsametoken,offeringayearlyplanshouldn′tbetheonlyoption.Amajorityofappsareofferingtwoplans.So,we′regoingtokeepthatinmindwhenwetalkaboutdesigningandshippingourpaywalls.IhavethisentireRevenueCatreportalongwithotherhelpfullinksonthisdocument.So,ifyouwantthisdocument,it′sgoingtobeinthedescription.Andwe′regoingtokeepreferringtothisRevenueCatreportaswestarttotalkaboutdesign,positioning,andtestingpaywalls.But,youcanalsodoyourownmarketresearchusingpaywallscreensandscreensdesign.Thesetwotoolsareextremelyhelpful.Paywallscreenswillshowyouallofthepaywalls.Youcanviewthemandpreviewthemallrighthere.Youcanseeexactlyhowmucheachoneoftheseappsaremakingandexactlywhichpaywallthey′reusing.Ontopofthat,screensdesignisveryhelpfulbecausetheywillshowyounotonlythepaywallsandthemonthlyrevenue,buttheywillalsoshowyoutheuseronboardingforeachandeveryapp.Theonboardingisprimingforthepaywall,sokeepinginmindandstudyingtheonboardingsofeachoneofthesesuccessfulappsisalsoveryimportanttothesuccessofthepaywallitself.Usepaywallscreens,useScreenshield′sdesign,usetheRevenueCatreportwhenyouweredoingmarketresearch.Whenyouwerethinkingaboutdesigningyourpaywall,lookatwhattheothermostsuccessfulappsinyournichearedoing.Howmanyplansthey′reoffering?Whatisthepricing?Howlongistheironboarding?Whataretheyaskingusersintheonboarding?Allofthisinformationshouldplayarolewhenyouplanondesigningyourpaywall.Andfollowingtheseexactstrategiesandkeepingaholisticpictureofyourapp,yourpaywall,youronboardingisveryimportant.That′showIwasabletoscalePuffCountto45Kpermonth.Itwasn′tjustbecausewehadanoptimizedpaywall.Wehadtheonboardingpriortothepaywallprimingtheusers.So,makesureyoukeepaholisticviewofyourappanditsonboardingwhileyouthinkaboutdesigningyourpaywall.Now,let′sgetintoactuallyputtingthepaywalltogether.Whatisthemostoptimaldesignforourpaywall?Themostimportantpartisclarityovercomplexity.Makeyourpaywalleasytounderstandataglance.Ifyoutrytomakeyourusersdotoomuchthinking,calculation,whateveritmaybe,theywillleaveandtheywillnotpayyou.Thepaywallisthemostimportantscreeninyourappbecauseitisthedecisionpointthatyourusersaremakingwhetherornotthey′regoingtopayforyourappornot.Duolingoexecutedthisperfectly.Theyprioritizeclarityoverpersuasionontheirpaywalls.Theyusedshortertrialsandtheyaddedfrictiontotrialreminders.Now,whatdoesthislooklikeinpractice?WecangoovertoScreenshield′sdesignandwecanseeexactlywhatDuolingowasdoingintheirpaywall.Clarityoverpersuasion.Theywouldshowusersatimelineofexactlywhathappensduringtheirtrialandwecanseethatinactionhere.Thisisnottheirrealpaywallscreenyet.Startmyfreeweek.Boom,atimeline.They′llremindyouin2daysbeforethetrialends.Clarity,trustbuilding.Andthenboom,theyhityouwiththerealpaywall.So,theyarebuildingtrustandclarityfortheusersbytellingthemthetimelineofwhat′sgoingtohappenintheirtrial.AnotheramazingexampleofthisisCalAI.Aftertheironboarding,theyhityouwiththisscreen.Notarealpaywallscreenyet.Wewantyoutotryourproductforfree.We′llsendyouareminderbeforethetrialends.Andthen,boom,therealpaywallscreen.Veryclear,buildingtrust,andthatwillhelpyouconvertmoreusers.Thekeyimportantthingtorememberhereistheusersactuallyhavetoturnonpushnotificationstobereminded.So,thataddsalittlebitoffrictiontothetrialreminders,andultimatelyhelpedDuolingoboostalotoftheirconversions.Yourjobonthepaywallisnottodazzleandoverloadyourusers.Itistoconvincethemthereisnoreasonnottopayorstartthefreetrial.Probablythemostimportantpartofyourpaywallisthepricepointthatyouchoose.Andifyoutakeanythingawayfromthisvideo,itshouldbethispointrighthere.SomethingthatI′vebeensayingforalongtimeandgetpushedbackon,priceyourappashighaspossible.Here′sthedatatosupportit.High−pricedappsgenerate,onaverage,36 of monthly LTV as a median,
5.4 times higher than low-priced apps at
6.67.Mid−pricedappsperformatroughlyhalfofthehigh−pricedapplications.It′sverysimpleinpractice.Chargemore,andyouwillincreasethelifetimevalueofyourcustomers.Don′tbeafraidtoABtestandchargeasmuchashumanlypossible.Itwillmakemarketingandscalingyourappsomucheasier.Andhereisthedatatosupportit.Chargemore,andofcourse,useahardpaywall.Hardpaywalls,higherprices,willmakeyoumoremoney.So,nowthatyouunderstandtheresearchbehinddesigningawinningpaywall,let′stalkabouthowtoactuallybuildit.Again,clarityovercomplexity,highlightthekeyvalueproposition,socialproofandtrustindicatorsmustbeonyourpaywall,oratleastyouronboarding.Andsomethingthatalotofpeoplemiss,youcancustomizeyourpaywallifpossible.So,let′sgetintothebestwaytodesignandbuildapaywall.Andofcourse,99designsisyourbestoption.Thepaywallscreenisultimatelythemostimportantscreeninyourapp,soitneedstobedesignedinthebestwaypossible.Youshouldn′tbethrowingthisonGooglePaintandsketchingoutyourownpaywall.Don′tdothat.Investinyourpaywall.Itisthemostimportantscreeninyourapp.Andthebestwaytogetascreendesignedisthrough99designsandrunningacompetition.Hereisthewinningpaywallthathelpedusscaleto45kpermonthforPuffcount.Igotitdoneon99designs.Igotover91differentpaywallsdesigned,andIonlypickedmyfavorite.Thisone,ofcourse,endedupbeingthewinner.Andthisistheonethatwemovedforwardwith.Asyoucansee,clearvaluepropatthetop,userreviews,buildingthatusertrust,thatsocialproof,andthenalittledescriptionoftheplanthatisrequiredbyApple,andthenofcourse,thepaywallbuttonhere,restorepurchases,termsandconditions.Thiswasacleanpaywallandtheonewemovedforwardwith.Superwallalsohasprovenone−clicktemplatesthatcangetyoustarted.So,ifyouhavealowerbudgetandyoudon′twanttoruna99designscontest,youcanuseSuperwall′stemplatesandbuildyourpaywalldirectlyinSuperwall.AndthisisexactlywhatIdid.Itookmywinningdesignfrom99designs,andthenwepulleditintoSuperwall,andwebuiltdifferentvariationsofthis.Andwetestedslightlydifferentdesignsaswell.Wetestedtwoplans.Wetesteddifferentbuttontext,andwe′llgetintothatinasecond.Butultimately,thecoreprinciplesthatyouneedtokeepinmindwhendesigningyourpaywall,itneedstolookprofessional,itneedstolookclean,andtakeinspirationfromyourbiggestcompetitors.Now,let′smoveontopositioningyourpaywall.Whenandhowshouldyoushowyourpaywall?Beforewegetintothis,let′sunderstandthestatistics.50happenondayzero,thefirstdaythatsomeonehasyourappdownloaded.Andthat′sbecausedayzero,thefirsttimetheydownloadyourapp,iswhentheuserscarethemostaboutyourapp.Ifyou′rerelyingonthemtocomebackinsideofyourappandupgradelater,andyoudon′thaveourpaywall,it′sgoingtobesomuchmoredifficultforyou.Andthat′swhy,asyoucanseethestatshere,hardpaywallsconvertfivetimesbetterthanfreemiumbecauseyouareforcingtheusertoconvertondayzero.HerewehavethefounderofApertureemphasizingthis.50conversionshappenondayzero.So,it′sveryimportantthatyou′repushingahardpaywallandyou′remakingtheusersconvertwhentheyfirstdownloadyourappwhentheycarethemost.Andusinganonboarding,whichwe′llgetintoasecond,issoveryimportantinencouragingthoseuserstoconvertondayzeroonyourhardpaywall.Andwhatshementionshereisalsoveryimportant.Ifyoushowthehardpaywallinstantlybeforebuildinganytrustwiththeusers,itwillfeellikeademand,notasimplenextstep.AndthisiswhywehadthelongonboardingonPuffCountbeforethepaywall.Theuserscamein,webuilttrust,weshowedthemthevalue,wedisplayedsocialproof,wecustomizedtheirexperienceusingalongsurvey,wetargetedthepainthattheuserswerefeelinginthesurvey,andonlythendidweshowthemthehardpaywall.Peopleclownmeallthetimeforhavingalongonboarding.Peopleclownmeforhavingahardpaywall.Thedataspeaksforitself.Thetopappsintheworld,thetopappfounders,arealsodoingthesamething.Whywouldyoudoanythingdifferent?Youneedtobuildcontextaroundwhysomeoneshouldpayforyourapp.Ifyoushowyourpaywallwithoutshowinganycontext,theuserswillnotconvert.Youdon′tevenneedtojusttakemywordforit.Herearefourotherappsdoingtheexactsamethingwiththeironboardingandtheirpaywall.permonthcalorietrackingapp,a10
per month period tracking app, 12permonthlanguagelearningapp,a1 per
month note-taking app, and of course,
here’s my app, Puff Count, up here.
Every single one of these is doing the
same exact thing. Let’s take a look.
Intro screen, onboarding, questionnaire,
and then they have a hard paywall.
Right here. That’s Cal AI, the period
tracking app. Intro screen, onboarding,
asking a bunch of questions, a lot of
questions, boom, hard paywall. Duolingo,
same thing. We’ve already looked at
their product. Lot of questions,
paywall. 1millionpermonthinnote−takingappCocoaNote,longonboarding,hardpaywall.AmajorityofsuccessfulappsontheAppStorearedoingtheexactsameblueprint.Whywouldyoudoanythingdifferent?AnothercheatcodethatIwanttopullinisagainbasedontheRevenueCatresearch,mostoftheseappsareofferingayearlyplanandamonthlyplan.Andonlyontheyearlyplanaretheyeverofferingafreetrial.Thatwayyouarepushinguserstotheyearlyplanandgettingahigherreturnquickersothatyoucanreallocatethatspendintomarketing.Andfinally,themostimportantpartofbuildingasuccessfulpaywallistoalwaysbetesting.YouneedtoABtestabsolutelyeverythinginyouronboardingandyourpaywallforittoconvertatitsabsolutemaximumpotential.AndthenumberonequestionthatIalwaysgetishowlongshouldItestmypaywall?It′snotabouttime,it′saboutvolume.YoucanABtestyourpaywallinanhouroritcouldtakeyouayear.Italldependsontheamountofusersyou′regettingtoviewyourpaywall.Themoredatayouhave,themoreusersyouhavegoingthroughyourpaywall,themoreconfidentyouwillbeonyourdata.AndyoushouldbeABtestingabsolutelyeverything.YoushouldbeABtestingyourpaywallandyouronboardingflow,andletmeshowyouwhatthatlookslike.InSuperwall,youcanbuildcampaignswhereyoutestmultipledifferentpaywalls,andyoucansplittheamountofusersseeingeachpaywall.So,totestthesefive,wespliteachpaywallinto20thateachpaywallwouldgetanequalamountofviews.Andthenyouwillseetheresults.So,hereforthisone,wewereABtestingtheheaderwordingofourpaywalls.Andasyoucansee,therewasaclearwinner.Thisone,thetrackyourusageheaderwording,hadamuchhigherestimatedaveragerevenueperuser.Itwas1.15 compared to the
lowest one at 39 cents. We were earning
$1.15 per user that saw this paywall,
which is much higher than everything
else. Superwall will use the testing
method, the AB testing method called
Bayesian analysis. You should build
campaigns and be AB testing every single
part of your paywall. We tested
different pricing. We tested annual
options. We tested discounts. We tested
absolutely everything until we landed on
the paywall that gave us the highest
lifetime value per install. And on top
of that, we also AB tested our entire
onboarding flow. We tested every single
different screen in our onboarding flow
to ensure that users weren’t dropping
off before they saw the paywall. We used
Mixpanel to AB test and build custom
events for every different onboarding
screen, but Superwall just launched AB
testing user onboarding flows, so you
can do this all through Superwall now.
But, the main point being, we wanted to
ensure that through our onboarding, we
were building positive friction. It’s
fine that some users are dropping off in
between our different onboarding
screens, but ultimately, we want to
retain a high percentage of those users.
91% of users got through our onboarding
and 27% started the free trial. And all
this data was out of 196,000
users. So again, we’re testing every
single one of these screens. We’re
testing the drop-off rate between each
one of these screens. And if one of
these screens produced a high drop-off
rate, we would either change it or
completely remove it. This is building
the sunk cost bias. This is walking the
user through their problem. And our
conversion rate on our paywall jumped
tremendously after we introduced this
onboarding and we had AB tested
everything in our onboarding to ensure
that we were building that positive
friction. And again, we were very
confident in this data because we had
125,000
users come through this onboarding flow.
So, the data was very solid. Same with
our paywall campaigns. We had tens of
thousands of views on each one of these
paywalls, and that is why we’re so
confident on the data. Another thing
that is very important to keep in mind,
you need to use the scientific method
when you are testing your different
paywalls. We only tested one thing at a
time. First, I recommend that you test
your pricing, and that should be the
only thing that you’re changing on your
paywall. Then, you can move on to the
less important stuff like the header
wording, maybe even the user reviews on
your paywall. Only test one thing at a
time. And that includes your onboarding.
Don’t change your entire onboarding and
change your entire paywall and test both
of those at the same time. If you change
more than one thing at once, you will
never understand what is driving the
actual real change within your tests.
And again, the overall goal in testing
your paywall, in testing your onboarding
should be optimizing for your LTV, but
not only that, the speed of return of
your investment. This is why you see so
many apps optimizing for a yearly plan
because they get the entire yearly plan
upfront. They get more cash upfront as
opposed to a weekly or monthly plan. If
you’re getting more money back quickly,
you can use that money to scale your
spend, your marketing efforts much, much
faster. To help you visualize what AB
testing your paywall looks like, it’s
not just your paywall that is going to
affect the results, right? It is your
marketing, it is also your onboarding.
And again, following the scientific
method, you should be optimizing your
paywall first. So, we need to test all
of these things, but let’s start first
with the paywall, which is what I did
for PuffCount. I AB tested four, five,
honestly, like tens of different
paywalls, and then we found our winning
paywall. And then we worked backwards,
and we’ve tested different onboarding
flows. We tested different lengths of
screens, different questions, and we
found our most optimal onboarding. Even
after that, we AB tested different
marketing angles. We AB tested different
paid ads, and we found our winning
couple of paid ad videos. And you need
to AB test each and every one of these
steps individually, and eventually, you
will find your best marketing videos,
you will find your most optimal
onboarding, and you will find your most
optimal paywall. And once you do all of
these things, you will have the winning
formula to scale your app to the moon
because you’ve optimized absolutely
every step of your funnel. You’ve
optimized the marketing message. You
have the winning onboarding that you
know converts users and primes them for
the correct paywall, and you’ve
maximized your LTV. So, ideally, your
LTV is much greater than what you spend
on acquiring customers on this side, and
this is how the best apps in the world
scale. It’s science, it’s numbers, it’s
AB testing. Do not give up, just get
enough data in your app, and you can be
very confident that you will get a
return on your spend. If you need help
building, optimizing, or scaling your
app, your paywalls, your onboarding in
general, I put together a group of
founders, and we meet every single week
to talk about exactly these strategies.
We talk about marketing, onboarding,
paywall strategies, everything to do
around building and scaling successful
mobile apps. So, if you want to join
that group, shoot me a DM on Instagram
at steven.builds, and I’ll get back to
you there. Hopefully, you enjoyed the
video. If you watched this far, you
probably got value from it. So, drop a
like on the video. I’d greatly
appreciate it, and be sure to subscribe
to the channel because I’ll be dropping
videos just like this all the time. I’ll
see you on the next one. Peace.